 Welcome to Sheboygan County Government, working for you. My name's Adam Payne. I'm the Sheboygan County Administrative Coordinator and co-host of this program with County Board Chairman Bill Gehring. And today, our guest is Finance Director Tim Finch. As you most likely are aware, Sheboygan County is in the midst of our 2004 budget process, as well as all local units of government in the county and throughout the state. And today, Tim's going to tell us a little bit about the roles and responsibilities of the finance department, as well as how our budget process is going to date. So Tim, good to have you with us today. Thanks, Adam. Good to be here. Tim, why don't you start a little bit about when you started working in the finance department and some of the roles and responsibilities of the finance department? Sure. Be glad to. I came to Sheboygan in 1999, moved here with my wife, Linda, and my daughter, Ashley, and then started in the finance department in May of 2000. So I've been there a little over three years. And the responsibilities of that department are quite extensive, varied activities, which I really enjoy. So it was a pleasure for me to be able to have the opportunity to take that position. Now, in the department, you have approximately how many staff and what are the general roles and responsibilities? So we have 15 staff on our table of organization. Actually, right now, we have three vacancies. So we really just have 12 people on staff right now. But we're responsible for the overall financial dealings of the county handle. Parts of the payroll system, although we're kind of changing how we do that, where that role is going to go to the IS department. So we're streamlining things a little bit there. But we're responsible for accounts payable, auditing, working with the external auditor, financial reporting. But one of my biggest responsibilities is dealing with making sure that you, the chairman, and that the finance committee have the information that you need to make decisions. So anything to do with finance is pretty much what we do in our department. And you're doing a good job. Oh, thank you. As many people, I'm sure, are aware of the budget every year is one of the most important policy documents that are developed. We're in the midst of preparing that. Could you give our viewers somewhat of a high-end overview of what that process involves? Sure. It's extensive. As you know, we start probably in February or March of each year thinking about what we're going to do for the upcoming year, trying to anticipate what's going to happen at the state level, what's going to happen at the federal level. Internally, what kind of changes do we see in our own operations? So it's almost a year-round process. And we have a little bit of a break, but we really start thinking about it February, March. And then we move into June is when it starts in earnest because we have our budget kickoff meeting. All the department heads come to that. The chairman usually will come to the budget kickoff. A number of supervisors will usually come. And we'll go through what the parameters are for that year's budget. If there have been any targets established, those will be given out to department heads instructions on how to prepare their budget. It's really a very comprehensive meeting to give them an idea of what they might be up against during their budget, and to help them do the mechanics of it as well. And then after the budget instructions are provided. And as you said, that's in early June. We have a specific goal. We have specific targets. You have a comprehensive set of budget instructions. Where do they go from there? Right. The next thing that they do is there's training available to them to use our computer system for budgeting because we do it all within our JD-Edward system. So there's training set up. And we have our own training room, which is very nice in Chewagan County. It's a huge asset to have a room where we have computers set up. People can come and train. It's a big screen. And they can see what they're supposed to be doing. So we use that to give training to anyone who is new to Chewagan County, or anybody who feels like they need a refresher on how to do the budgeting. So that would be the next step. From that point on, once they have a budget developed, and this would be the department has responsibility to do that for their department, then they would meet with you and with myself to kind of go over their budget. And we, as you know, we help them look for ways that maybe they need to, things that maybe they've done not quite correctly, problem areas that might come up when they meet with their committee or with the finance committee. So we kind of help them get ready for the process and suggest cost-cutting measures if we think there's something that they could do to cut costs, or increase revenue. We'll suggest that too. So that's the next step. Once then, they get passed UNI, which is the first kind of the first line of defense. Then they have to go to their committee and they'll discuss the budget, what they're proposing with their committee, and their committee really is the one who will bring it forward to the finance committee because it's each liaison committee's job, really, to approve that budget and to be comfortable with what's in there. So then from that point that goes to the finance committee, they'll look at every single budget in the county and they'll ask supervisors to come in. Normally, the chairman will be there for a lot of those meetings, and then they'll go through that budget one more time and ask questions, challenge the departments to defend what they have in their budget. From that point on, then we actually go to the county board and there's a series of meetings where the county board will look at the budget in total and make any refinements, and then finally adopted in November 4th. So it's a very long, long process. In fact, we rarely get a break from budget. It seems like we start gearing up already in February, March, the kickoff, as you said, in June, and then all the departments and liaison committees are working at it until, as you said, the county board ultimately approves it in early November. Thanks, Jim. And as Adam already discussed, we come up with targets, and he, along with the executive committee and the finance committee, began to develop the target system of budgeting in 1999. Can you give us a little more insight into how an individual committee would develop their budget for their liaison department? Sure, sure, the budget kickoff meeting in June will give them all the information they need to go back and start working on their budget. It'll give them the targets. If a target's been established by county board chairman, the finance committee, the administrative coordinator, they're gonna have that information. So they'll know at their fingertips what they have to shoot for as far as a target, and it'll probably be a levy for that department. And they'll know, here's your target levy. You need to stay within those parameters, so they'll go back and they might adjust revenue or expense, but they need to come back with that target. So the department head really has the first responsibility to do that. And then when they feel like they've done what they can do, then they go to their liaison committee, and then from that point, it's that committee's responsibility to challenge the department head or approve the budget, whatever they feel they need to do. They really, the department head prepares it, but the committees are the ones, it's really their budget. Thank you. The target system was really established to do away with the peaks and valleys, the up and down movement of the rate. Is there a limit to how much the county can tax? Yes, there is. In 1992, the state imposed limits for the counties, and actually what they did was they set the rate in effect at that point, and they said you cannot exceed this rate. You can increase your levy dollars. If your equalized value goes up, then your dollars you can levy will go up, but your rate cannot go up. There are some circumstances where you can increase it, but for the most part, you're pretty much locked into what that rate is. Swiggan County and all the other counties are set at what that rate was back in 1992. How was the county performed in the last couple of years? What has their rate been? Sure, I've got a chart that I could kind of demonstrate that. For the last few years, if you look at the chart here, we've got a chart with 1994 to 2004, and over the last few years would be, we can take 2000 to 2004. See, the rate's been pretty steady. Back in 1999, 2000, we were at $6.30 per thousand of equalized value, and then we had a little bit of a bump here in 2001, but then since then, we've held the rate steady or been able to drop a little bit. We actually went down two cents in 2002, went down another two cents in 2003, and 2004, the last column, that's projected. We don't have a final rate established yet, but we're looking at $6.46 as a preliminary rate. That could change somewhat. I wouldn't expect to see that go down at all. My sense from discussing with Finance and with Adam and the Chairman that I think probably, if anything, that will go down somewhat. We're gonna do our best to do that, but you can see the last few years, we've done a pretty good job of keeping the rate steady. I think our viewers are probably very happy that the rate has stayed fairly steady, not these peaks and valleys. What are the main revenues to the county and the main expenditures? Sure. Can you touch upon those? Oh, absolutely. I've got a chart here for that, too. Oh, and just quickly, we do have one more here regarding our proposed rate for 2004. We've just kind of broken down of the $6.46 rate, which, again, is preliminary. That could change before the budget is adopted, but just the main areas that we're looking at, where we spend our tax dollars, number one would be the Sheriff's Department. That's the piece of the pie that's in blue. And you can see of $6.46, that's $1.83. So that's the number one use of our tax levy here in Chewbacca County. And then number two would be the pink, purple piece of the pie here, health and human services. Those are all our community programs. Debt service is the yellow portion. And as you can see, that's also substantial, $0.86. Health care centers, Rocking Hill, Sunny Ridge is the next slice of the pie there. At 81 cents, then every, all the other miscellaneous general fund departments, 73 cents, and the highway at 55. So these kind of, in a big picture, a nutshell of where we spend our money, it kind of gives you an idea of where your tax dollars did go. And then for revenues, this is for 2003. This is the actual adopted budget. We haven't finalized our 2004 yet, so we're gonna show you some 2003 actual numbers. We've got about $135 million of revenue. And again, we've got a piece of pie here broken up into slices. A number of large categories, the blue slice here, intergovernmental revenue, and what that is, that is state grants primarily and transportation aids. And those departments that would be affected would be health and human services, the highway department, and there are some other departments that also receive state grants a number of them. So those are pretty much state dollars, and as you can see, they're substantial. However, they are declining, and probably in future years will decline even more. Small interest, another revenue is just kind of a small piece of the pie. We do get interest on our investments. So that's a small chunk. Property taxes, this is the taxpayer's portion in gray. And as you can see, it's quite large, 29% of the total. So that's the taxpayer portion. Smaller piece here on use of fund balance. That's the little green wedge there where we abuse fund balance, also called the rainy day fund. Something that, it's good that we have that. We're in a much better position than some other counties who don't have much. And also the state has little to none of that as well. So we're fortunate here we do have that, but we do use it too. So we'll continue to do that. Public charges for services in blue, number of departments charge for things that they do for the public. The number one item in there would be the healthcare center's room and board charges for the nursing home residents. Fines and fees is a small part. Binding proceeds, again, for our capital projects. Small portion. And then interdepartmental revenue would be for activities done internally between departments within the county. And then on the expense side. Again, we've got a pie. And just starting down here, I'll start with the blue one. General administration would be for our general departments in the county. And we have a number of those that provide services. Would be the blue. Health and human services is in the white. You can see that's 27% of our total expenditures for 2003. So that's very large. That would be our largest source of expenditure would be the health and human service department. Health care centers. Also quite large in the pink there, 23%. The interest and distinction here is that healthcare centers are almost as big as health and human services in expenditures. However, the levy that the taxpayer has to provide is a lot less because they're able to charge for more of their services. Public works, which would be highway, airport, et cetera is in blue, 9%. And then everything else is kind of broken out. Justice and law would be 12%. So it just kind of gives you a little bit of an idea of where you do spend your money. In fact, as people are looking at this and that's a lot of information and a lot of figures, but the key thing to remember, 136, 138 million dollar budget. Really the largest departments, in fact, the two largest departments that make up half of our budget are health and human services and the healthcare centers. The highway department then falls in there as one of the larger ones. But after that, as you pointed out earlier, 23 departments, they all fall into a smaller piece of the pie there. There's three or four that are really the key departments that are creating the most expenditure and cost and relying on the levy. Absolutely. As the chairman of the board, I certainly don't want to increase the levy if I don't have to and I think most supervisors would agree with me, but there are certain pressures on the county budget. Could you talk about some of those pressures that seem to keep pushing it, raising the rate and the levy? You're correct. We have some very big pressures these days. Intergovernmental transfer is one of them. It's a funding mechanism for the healthcare centers. Actually, they're federal dollars that channel through the state to the healthcare centers, but only to county run nursing homes. And they're designed to offset the losses from the Medicaid rates, not actually meeting the cost to provide care to the patient. Typically, county nursing homes have a higher percentage of Medicaid residents, so they end up with larger losses due to the Medicaid program. So IGT is intended to kind of offset that. And it has helped, it's helped Shibuya County tremendously over the last few years. Unfortunately, it's going away. It's being reduced significantly. In 2003, we budgeted 5.4 million for IGT. Now our optimistic budget to date for 2004 has been 2.7 million, which is what all the information we had led us to believe that's what we'd get. It's possible we could even get less than that. So IGT is one issue that we have to deal with, and it's a big one. Wage and benefits, wage is probably the number one issue that every employer has to deal with because it increases geometrically. As it compounds, it's just like a savings account that you're getting interest on interest. Well, wages are exactly the same. Every time you have a 2% or 3% increase in wages, that compounds the next year when you have a two or 3% increase. So long-term, wages are the number one issue that we have to face. And that's very difficult because you have union contracts that require you have certain increases. You want to pay your people appropriately. But it's something we need to deal with. So wages, benefits, we talked about IGT and benefits. The number one problem we have right now is health insurance and we're not alone in that. Number of other counties and cities have had a problem with that as well as private business. And we have experienced larger than normal utilization of our healthcare plan and we're self-funded. So we cover the entire cost of it. So we've had to deal with that as you know, we're still dealing with that and it's getting worse and not getting better. Are there other impacts of the state budget problems that face us such as shared revenue? Shared revenue is another big issue that was reduced for 2004. We're looking at a reduction of between five and $600,000, which is a lot. It's something we've been able to manage through our budget process with sitting targets for departments. And we knew it was coming. So we built that into our budget plan. But it's still very difficult to deal with and if it becomes worse, then we could be in a worse situation. So that's also an issue that we have to. And finally the issue of funded and unfunded mandates that we've heard a lot about but haven't seen a lot of action on. Yeah, unfortunately, no. The states in a bind, they have a budget, they have to balance. And one example would be correctional out of county placements of juveniles and correctional institutions run by the state. Their fees have increased two years in a row, I believe now about 12% per year. So they, and we have no control over those fees. We have to pay those. And we have to place juveniles when we're ordered to do that. So that's an underfunded mandate that probably will get worse. Thank you. Well, if you've stayed with us this long, I give you a lot of credit because again, a lot of information, a lot of numbers, finances, can sometimes tire one out in a hurry but Tim Finch and his department have done a tremendous job. And as he pointed out earlier, really the last four or five years, the county board and our management team as a whole deserve a lot of credit because we have flattened that rate out. We intend to continue to do so under the leadership of Chairman Gehring and the finance committee and others. And this year we are positioned for success in spite of a $2.7 million reduction for our healthcare centers. In spite of a $600,000 reduction in shared revenue. In spite of the fact that our wages and benefits are going up almost $2 million. In fact, Tim mentioned health insurance. We saw a 29% increase for 2003 and we're looking at somewhere around a 12, 15% increase for 2004. These are huge challenges that the board is grappling with that our management team is grappling with. And because of, again, good teamwork and a successful budget process, we're positioned for success. Let's turn away a little bit from all the numbers and focus a little bit on some of the very good things that have also been going on in spite of the challenges that we face financially. Tim, why don't you talk a little bit about some of the ongoing and future capital improvements that we're making in Sheboygan County? Sure, sure. That would be kind of fun to do. Get off the budget woes that we have in Sheboygan County. We have a number of projects for 2004 and through 2008 when we have a five year plan so for 2004 we're looking at continued improvements at the airport with the extension of Runway 321 and also expansion of some of the general taxiways there. Some planning department changes the Green Bush Trail extension. Science edition right here at UW-Sheboygan is in this year for the last half of the begin in 2003 and it'll be finished up in 2004. So that's gonna be a very nice project to finish up. Also upgrading some roads and parking lots here at UW-Sheboygan. Computers seem to be a constant battle to keep those upgraded and running. So every year pretty much we see additional hardware in there for replacement of servers and that kind of equipment. The Sheriff's Department is gonna build a new storage shed for cars and for evidence and I believe it also includes Dignity evidence so that'll be something new that they have to start doing. So that's in for $300,000. It's the Highway 23 and County C improvement there and again another software project for about 150,000 so it's got a number of things in 2004 and very exciting for 2007 and 2008 would be right here at UW-Sheboygan the information technology resources building project. So if people wanted to see something brick and mortar they can go out to our airport, they can go to Rocky Knoll, they can take a look at the improvements that are presently being made at Sunny Ridge. They can come right out here to UW-Sheboygan and look at the library edition and as you just mentioned there's a technology center planned as well though that's in a future five-year plan which a future board will deliberate and decide upon but we do have long-term planning here and good things are happening. Yes, they are. With all this discussion of the budget process and the committee meetings and county board meetings, the five-year planning, how did people get involved? How do they have their voices heard if they're interested in weighing in on what our present tax rate is or how a service might be adjusted or if they have a good idea for us? Sure, there's a number of opportunities for them to do that. Probably the best way is to go to some of the liaison committee meetings where they discuss budgets at the early level. That's where the rubber really meets the road and they get into nitty gritty of what's in that budget. They can also go to finance committee meetings where the finance committee is going over the budgets. They go over every single budget and accounting, every department. So if you wanna get a real flavor for what goes on and how the budget is determined, that's a real good place to do it. They can also attend the county board meetings in October. There will be meetings, the budget will be presented to the county board on October 21st, deliberated on the 28th, and then adopted on November 4th. So October 21st at six o'clock in the county board chambers, which is in the courthouse, and October 28th would be very important meetings for the, especially on the 28th. That's the opportunity they would have to hear each budget kind of reviewed on a line-by-line basis as supervisors ask questions. So I would encourage them to do that, but even prior to that, come to a finance committee meeting because there's a lot that goes on before it gets to the final stage that give you a real flavor of how the budget's developed. Good advice. We also have 10 standing committees in the county, and whether you're interested in natural resource protection, land conservation, agriculture, again, finance. There are law, the airport, the highway department. Really, if you wanna get a good flavor, for what's specifically going on with those particular areas of interest, look up our agenda on the website or give Julie Glancy our county clerk a call or any of the three of us, and we'd be happy to share that information, but that's where you can really have some direct input as part of those public, open public meetings, those committee meetings. We've talked about it before. You mentioned it earlier with our healthcare centers. It's one of our, either number one or number two, largest department in expenditures. They don't utilize as much levy as the sheriff's department or highway department because they can charge for a lot of their services, but as many of our viewers may know, the levy is going to nearly double for our healthcare centers for 2004. We're very concerned about the reduction in state and federal dollars to maintain operations and the healthcare centers committee, the executive committee have recently supported in our forwarding to the board the creation of a citizens task force. Again, to get public input. What can you tell us about that, Tim? Sure, as you mentioned, the healthcare centers are a large talent. Probably our two biggest assets in Sheboygan County are Rocking Hill and Sunny Ridge and provide service to our part of our population that is maybe more vulnerable than other parts of our population. So they're very important assets to us. They're also very expensive. It's an expensive operation to run and because of IGT, it's gonna become more costly and the taxpayers gonna have to pay more to maintain the healthcare centers. The citizens task force was generated to give the public a vehicle for giving their input into what should be the future of the healthcare centers. How can we fund the care that's getting more expensive and we're getting fewer dollars than the state and federal government? You know, what's the best way to do that? What's the level that we wanna provide in Sheboygan County? Do we wanna provide the number of beds that we have now? Do we wanna provide a different number of beds? Do we wanna do some alternate kind of care? So many things you can consider in healthcare. It's just a huge field. But this is to give the public input because it's important that they have a chance to say what's done with these assets which belong to everybody in Sheboygan County. So it's a chance for them to have their CNB part of the process. So hopefully folks will be hearing more about this proposed citizens task force. It goes to the Full County Board this month. Again, it's been forwarded by the healthcare centers committee and executive committee. And we look forward to hopefully that being supported and getting input from you on where we're headed and how we can continue to improve our operations and pay for them. With that, Tim, we wanna thank you for being our guest today. My pleasure. A lot of information. And if you have any questions about anything you saw today or heard, please don't hesitate to pick up the phone and contact Tim Finch or a member of his staff or myself or Chairman Gehring. We'd be happy to try to help you with your questions or get you in the right hands. Next month, our guest will be Rebecca Persick. She is the new family court commissioner. And we look forward to having her with us to talk about her new roles and responsibilities as the family court commissioner. So until then, thank you for joining us. Or what I believe, you can't be heard. The whole system, honest voice and politics. There's no chance of that. At least that's what I used to think about politics. I can make a difference. 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